Asia Base Oil Price Report


Price discussions for spot sales took place at lower levels for most base oil cuts in Asia, while persistently weak demand against ample supply put a damper on closing of deals.

While most of the steeper price decreases observed over the last three months had affected the heavy-viscosity base oils, because demand for these cuts typically wanes in the winter, the low-vis oils also underwent revisions as producers were anxious to place cargoes before closing their books for the year.

Offers were adjusted down once again to encourage sales, but the need to keep inventories at a minimum on the consumers’ side, and uncertain prospects for demand from downstream applications in the first few weeks of 2016, resulted in weak buying appetite for most grades.

A majority of cuts underwent reductions of U.S. $10 per metric ton -$20/t week on week, with the exception of bright stock, which seemed to maintain a steadier course in terms of pricing.

This was partly attributed to the fact that bright stock supply was reported as better-balanced against demand, and that this cut is difficult to replace in a number of applications.

In a few instances where consumers had an urgent requirement of bright stock, prices registered an uptick of about $20/t-$40/t, sources said, reversing the downward trend seen over the last several weeks. There was particular interest for this cut in China, where buyers have depleted stocks and are now looking to replenish supplies and book cargoes for January delivery. But numbers also inched up in the Southeast Asian market.

On the other hand, a number of API Group II cuts continued to be used in applications which traditionally require Group I oils, because the price premium for the higher-performance products has vanished – and in certain cases and areas, Group II oils are, in fact, less expensive than their Group I counterparts.

In India, buyers and sellers were finding it difficult to agree on prices, with a wide gap separating bids and offers. Group I solvent neutral 150 offers were hovering at around $470/t-$480/t CFR India, but buyers’ ideas were at least $10/t-$20/t below these levels. Similarly, selling indications for 500SN were close to $480/t-$490/t CFR India, but buyers appeared unwilling to accept these numbers. Bright stock was being discussed at around $980/t-$1,010/ton CFR India.

Within the Group II category, prices in India were mentioned at $510/t-$530/t CFR India for 150N and at $670/t-$700/t CFR for 500N.

While some Asian participants tried to maintain an optimistic view about a price recovery in the first quarter – supported by improved demand as consumers enter the year with lean inventories – others were less confident that demand would improve, as general economic conditions in the region were expected to remain soft.

Spot price assessments portrayed below for the Asian market were mixed this week. Some base oils experienced downward adjustments on lower buying and selling ideas, while a few ex-tank Singapore numbers were moved up to bring them more in line with currently discussed values and published prices – which are widely regarded as benchmarks by the industry, but do not reflect actual market increases.

On an ex-tank Singapore basis, Group I prices were revised up $30/t to $540/t-$570/t for 150SN, and $620/t-$640/t for 500SN. Bright stock was adjusted up by $40/t to $970/t-$990/t.

Group II 150N values were unchanged at $530/t-$550/t ex-tank Singapore, while the 500N was adjusted up by $30/t at $660/t-$680/t.

On an FOB Asia basis, Group I 150SN was holding at $460/t-$490/t, and 500SN was down by $10/t at $540/t-$560/t FOB.

Bright stock prices were adjusted up by $40/t to $920/t-$950/t FOB to better reflect the levels at which discussions and deals were taking place.

In the Group II category, prices for 150N were assessed down $10/t at $450/t-$470/t FOB Asia, while 500N was lower by $20/t at $560/t-$590/t FOB Asia.

The 4 centiStoke and 6 cSt oils in the Group III segment were unchanged at $870/t-$900/t FOB Asia, while the 8 cSt grade was stable at $630/t-$650/t FOB Asia.

Upstream, crude oil prices edged lower after an OPEC report showed that the group increased its crude production in November, but also predicted further output declines from non-OPEC nations.

January ICE Brent Singapore futures were trading at $37.83 per barrel in afternoon sessions on Dec. 14, compared to $42.91 per bbl. on Dec. 7.

Quite a few fresh shipping inquiries emerged this week, with a majority of them involving cargoes ex-South Korea and Japan. A 1,000-ton lot was heard for Onsan, South Korea, to Tuas, Singapore, for December dates. A 2,000-ton parcel was mentioned from Onsan to Taichung, Taiwan, for prompt shipment. A 2,000-ton cargo was heard for Onsan to Tianjin, China, for Dec. 22-25 lifting.

A 5,000-10,000-ton lot was being discussed forOnsan to Antwerp, Belgium, for second half of January shipment. A 3,000-ton cargo made up 2,000 tons of 150N and 1,000 tons of 600N was expected to be shipped from Yeosu, South Korea, to Qingdao, China, around Dec. 21-25. A 2,000-ton lot of two grades was on the table for Yeosu to Singapore for second half of December lifting. A 1,000-ton parcel of 150Nwas mentioned for Daesan, South Korea, to Bayuquan, China, for December dates.

In Japan, a 4,500-ton lot was still on the table for Mizushima to Singapore and Port Klang, Malaysia, for Dec. 21-25 lifting, requiring a ship inspection report.A 3,000-ton cargo was also heard for Mizushima and Yokkaichi, Japan, to Hong Kong and Manila, Philippines, for January lifting.

Lastly, a 1,000-ton cargo was being worked on for Singapore to Chittagong, Bangladesh, for Dec. 20-30 lifting.A 1,000-ton parcel was mentioned for Hong Kong to Yokohama, Japan, for prompt shipment.

Gabriela Wheeler can be reached directly at

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